Phoenix Area Primed for Housing Recovery

May 25, 2012 (Shirley Allen)

Monthly sales of new and resale homes in the Phoenix area fell in April but home prices rose to their highest level since November 2009 as low housing inventories and a sharp drop in foreclosure re-sales puts the area on firm footing for a housing recovery according to the latest housing data released from DataQuick.

A total of 9,450 new and existing homes and condos closed escrow in the Maricopa-Pinal counties area in April. Sales were 6.0 percent lower than the 10,005 homes sold in March and 3.0 percent lower than the 9,745 homes sold in April of 2011.

Home sales typically increase about one percent between March and April and were 2.3 percent below the average number of homes typically sold in April.

New homes sales were 40.3 percent higher than in the same month last year, their highest since 2008, but were still well below what is average for the month. Sales of existing homes were 5.5 percent higher than the April average.

Cash buyers accounted for 45.0 percent of all purchases in April, unchanged from March and up from 44.5 percent a year earlier. The record for cash purchases was in February 2011, when 48 percent of the sales were for cash.

The price that cash buyers paid for their purchases increased to $120,000 in April, which was up from $112,500 in March and $91,900 in April of 2011.

Absentee buyers, usually investors and vacation home buyers, accounted for 40.2 percent of all homes sold in April, down from 46.2 percent in March. The prices they paid for their purchases increased to $119,000 from $117,500 in March and were up from $99,000 in April of 2011.

The overall median price paid for new and resale homes and condos in April was $142,000, up from $136,500 in March and up from $120,000 in April of last year. It was the fifth consecutive month that home prices have increased year-over-year following 17 months of declines.

The current median price is 46.2 percent below the peak median price of $264,100 in June 2006, however, prices have improved by 20.0 percent since August 2011, which is when prices in the area reached its post-peak trough, and are at their highest level in 29 m onths.

Distressed property sales accounted for 39.0 percent of the re-sale market in April, with foreclosure sales accounting for 26.6 percent of all re-sales, down from 31.7 percent in March, and short sales accounting for 12.4 percent of all re-sales, down from 13.3 percent in March. Foreclosure re-sales peaked in March 2009 at 66.2 percent of all re-sales.